Can You Spot the Odd Man Out?

European car sales recently hit a 20-year low, with German car sales plunging almost 10% for the most recent month.

The large German bank, Deutsche Bank, is reported to have less than 2% capital, so it’s levered almost 60 times (when Bear Stearns went under it was levered over 40 times), exposing the bank and the country to significant risk.

Germany’s main trading partners are experiencing either slowing or outright contracting economies.

Meanwhile, the German stock market is near all-time highs.

Spanish home prices fell another 6% last year. Spanish unemployment is near 30%, with youth unemployment over 50%. Spanish loan default rates are skyrocketing.

Meanwhile, Spanish government bonds keep going up in price, down in yield.

In the U.S., median wages are declining. Taxes are rising. Healthcare costs are increasing. Education costs are through the roof. Most of the new jobs created are low wage and part time. And the central bank must print hundreds of billions of dollars a year to boost people’s confidence (and the bank’s profits).

Meanwhile, U.S. equity markets are at all-time highs.

If these sorts of fact sets leave you scratching your head, you are not alone…

These are the sorts of things I wrestle with regularly, and write about often. I know that contradictions can exist in life, and can even last for years, but it doesn’t make handling them on a day-to-day basis any easier.

The problem is that, just like everyone else, I have to make financial decisions, and life decisions, knowing that all of these contradictions exist. How the conflicts resolve can have a huge effect on how good my decisions prove to be.

If Germany is able to hold together the euro and weather the downturn of its trading partners, then investing in the country could be pretty smart. But, if instead, the weight of the world finally becomes too great and pulls the country lower, then investing now would be buying the top of the market.

As for Spain, it’s much the same. Can it work through its issues and once again become the darling of the euro zone, or is it bound for years of a flat and falling economy?

The list goes on and on, and eventually reaches back here at home, in the U.S., where the decisions become more personal.

Should my kids study health care related topics? Should they disavow anything that has to do with finance? Should they buy homes in the next few years?

The success or failure of each decision clearly lies in how the contradictions of today play out. And therein lies the rub.

No one knows for sure what’s coming, so we must do our best to estimate how things will change in order to make the best decisions we can. There are no do-overs, no mulligans.

That’s why, in order to build a framework for figuring out where things are headed, we continually develop and challenge our own research. We look at demographics and economic trends from as many different angles as we can. Then we add in the views of others, both those that support our point of view and those that disagree, so that we can build as complete a picture as possible to use in decision-making.

And this is where you come in.

After we’ve done all these things, we communicate this information with readers and audiences. You.

We use books, reports, interviews, newsletters and updates to get our research across.

While each of these formats has its own positives and negatives, there is one way of communicating that stands out – talking face to face.

When we meet people… when we have the chance to bring together many people who are seeking out answers to the same sorts of questions… when we bring together researchers who are in the business of providing points of view… well that seems to be the best way to spark great conversations and bring the most clarity to our otherwise cloudy world.

I say all of this because we have scheduled just such a meeting for this fall, and we are excited about the line-up of speakers, as well as the already strong demand for seats. It appears that many people share our search for answers, and want to make the best decisions they can in these crazy financial times.

If you don’t see central banks printing trillions of dollars as a path to financial healing…

If you don’t think the Japanese can save themselves by sacrificing their consumers…

If you don’t think that Greece will repay its debts by firing all of its workers while raising taxes…

Then join us.

At our conference, the Irrational Economic Summit, November 6 – 8, we’ll walk through this world turned upside down, and provide a vision as to how these contradicting situations will resolve.

Joining us for a few days in California could help you make some of the best financial decisions of your life… and avoid some of the worst!

What if I told you up to 95% of companies currently trading on the stock market today are essentially stealing money right out of your pocket!? This includes some of the biggest names in the corporate world… companies that trade millions of shares a day, who you might be invested in right now!

Discover just how far the deceit on Wall Street goes and how you can still uncover many lucrative opportunities in the stock market today, in our new infographic: How CEOs are Earning 335x MORE Than Their Own Employees

About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.

About Us

Economy & Markets Daily is the first e-letter of its kind that uses the power of demographic trends and purchasing power to accurately identify economic and market boom and busts.

We believe that knowing what consumers are going to buy next (purchasing power)... or what they'll stop buying soon... is the best way to protect your investment portfolio, maximize your returns, and make smart business and financial decisions.

Each week day, Harry Dent, Rodney Johnson, and Adam O'Dell share with you their views on demographic trends, their market research, their economic research, the housing market, economic cycles, market cycles, business cycles, and the looming economic collapse and market crash.